Australia has flagged its intention to ratify the Paris Agreement, which aims to keep global warming to no more than 2 degrees Celsius above pre-industrial levels and pursue efforts to stay below 1.5 degrees Celsius. To have any chance of achieving such targets, we need to reduce emissions from both the industry and land sectors.

The centrepiece of the Commonwealth Government’s climate policies is the Emissions Reduction Fund (ERF). Various commentators and policy analysts have proposed transforming this into a baseline-and- credit scheme, a type of emissions trading scheme. These proposals, however, have been made in the absence of rigorous analysis of how the ERF has been operating.